Brent Crude Tops $90 Again as Trump Urges UK’s Burnham to Open North Sea Fields
Summary
- Escalating military tensions between the US and Iran and concern over shipping disruptions in the Strait of Hormuz pushed Brent crude back above $90 a barrel.
- Growing anxiety over the global oil supply chain is also lifting broader commodity prices and adding to concerns about the global economy.
- Trump said expanded North Sea oil development could increase oil supply and pointed to the possibility of broader UK North Sea energy development, arguing it could ease Britain’s economic troubles and help make it a wealthy nation.
Forecast Trend Report by Period
Brent rises 2.7% on fears of prolonged Hormuz disruption
Trump promotes North Sea as alternative source of supply
International oil prices are surging as military tensions between the US and Iran escalate. Brent crude climbed back above $90 a barrel for the first time in more than a month on concern that disruption to shipping through the Strait of Hormuz, a key artery for global oil flows, could persist.
ICE Futures Europe data showed Brent crude for September delivery rose 2.7% from the previous session to $90.51 a barrel as of 6:30 a.m. in London on July 19. It was the first time Brent had traded above $90 since June 11. West Texas Intermediate for August delivery was up 2.3% at $84.41 a barrel.
Tensions have flared again after the US struck Iran and Tehran retaliated by targeting US military bases in the Middle East. The growing risk of prolonged disruption in the Strait of Hormuz is deepening anxiety over global oil supply chains. The pressure is also spreading across broader commodity markets and stands to weigh on the world economy.
The US is now looking to the UK’s North Sea oil fields as a possible way to boost supply. President Donald Trump wrote on Truth Social ahead of the formal inauguration of Prime Minister-designate Andy Burnham that "the people of Aberdeen, Scotland, are dancing in the streets" after Burnham said he would fully open the highly valuable North Sea oil fields. Aberdeen is the center of North Sea oil development.
Trump also wrote that the North Sea is "one of the largest resources in the world" for high-quality crude, with reserves that could be used for hundreds of years and with much more still undiscovered. He argued that would pull the UK out of economic difficulty and make it one of the world’s wealthy countries.
Trump’s comments amounted to an early assertion that the UK would scale back its emphasis on renewable energy and move ahead with North Sea oil development even before the next prime minister formally takes office.
The UK Labour government has focused on expanding renewable energy and has not approved new North Sea oil and gas development. Trump has publicly criticized that policy. Burnham has also said he would maintain Labour’s 2024 general election pledge to halt new North Sea oil production licenses.
Still, in the UK he is seen as taking a more flexible approach to North Sea energy development. The Financial Times reported that the British government may present other options to allow more drilling in the North Sea, including additional exploration near existing fields.
Lee Hye-in, Hankyung.com reporter hey@hankyung.com
Korea Economic Daily
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